Shares of Amazon.com, Sprint Nextel and Research in Motion take pounding

Wall Street on Tuesday severely punished Netflix (NASDAQ: NFLX), with shares of the streaming video company plunging 35% in the wake of a mass subscriber exodus.

On Wednesday the bears spread the pain, with three different tech companies taking a big hit in share price, though nothing approaching Netflix's ticker meltdown.

Amazon.com (NASDAQ: AMZN) saw shares drop 28.75, or 12.7%, to 198.40 after the online retailer reported a 73% decline in third-quarter net income from the same period last year and issued disappointing fourth-quarter guidance.

Net income for Q3 was $63 million, or 14 cents a share, versus $231 million and 51 cents a share in the year-ago quarter.

Analysts had expected an average of 24 cents a share earnings in Q3, so that's a big miss.

Despite a 44% increase in revenue to $10.88 billion from $7.56 billion a year ago, the online retailer also fell short of analysts' estimates of $10.93 billion in revenue.

Analysts in recent quarters have expressed concern about Amazon's rising costs cutting into profit. That's what happened in Q3 as operating expenses increased 48% to $10.8 billion from $7.3 billion in last year's third quarter.

Amazon, of course, prefers to look to the future, specifically the introduction of its Kindle Fire tablet to the buying public. In statement accompanying the earnings report, Amazon CEO Jeff Bezos said, "In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. And based on what we're seeing with Kindle Fire pre-orders, we're increasing capacity and building millions more than we'd already planned."

Despite that rosy scenario, only the top end of Amazon's fourth-quarter sales forecast of $16.45 billion to $18.65 billion exceeded consensus estimates of $18.10 billion in Q4 sales.

Sprint's big gamble sparks concerns

Shares of wireless carrier Sprint Nextel (NYSE: S) fell 19 cents, or 7.0%, to 2.51 after the company reported a third-quarter net loss of $301 million, or 10 cents a share, an improvement over the loss of $911 million, or 30 cents a share, in the year-ago quarter. Revenue was $8.33 billion, up 2% from $8.15 billion last year.

Sprint reported adding nearly 1.3 million total net wireless subscribers in Q3, which the company said was its best performance in more than five years.

In a conference call following the earnings release, Sprint CEO Dan Hesse expressed optimism that Apple's iPhone -- which Sprint began selling for the first time on Oct. 14 -- would draw even more subscribers.

"Our early results selling the iPhone and iPhone 4 confirm the iPhone's ability to attract new customers," Hesse said.

Unfortunately for Sprint, using the iPhone to draw new subscribers will come at a heavy cost. Because the company is subsidizing each buyer's iPhone for about $200 more than it pays for other handsets, the iPhone will cost Sprint at least $15.5 billion over the next four years, so the Apple device won't be a profit-maker until at least 2015.

That, coupled with the fact that Sprint said it needs to raise up to $7 billion to cover the iPhone investment and a major network upgrade, is making some investors and analysts nervous. Sprint is playing a high-risk, high-reward game now against two much larger rivals -- Verizon and AT&T.

"They're betting the house on two things at the same time," said Mizuho analyst Michael Nelson. "If they pull it off, great. If they don't, their financial performance would get materially worse, and they could have significant liquidity risks."

Sprint said it likely would raise the operating funds through $4 billion in debt refinancing and up to $3 billion in vendor financing deals.

More PlayBook woes

Finally, shares of BlackBerry maker Research in Motion (NASDAQ: RIMM) fell 1.55, or 7.0%, to 20.72 after the Canadian company said a long-awaited update to the PlayBook tablet's OS would be pushed back four months to February. I blogged about this earlier. Don't be surprised if there is no update. I suspect that's what some investors are beginning to believe.